Randy from the iMovie team read my recent post on image stabilization and wanted to pass on some other things that are worth knowing about the way it works in iMovie '09.
Not Just a Zoom
The stabilization feature in iMovie '09 does more than just a simple zoom, which could be understood from my original post. iMovie primarily rotates and moves each frame to keep the objects all the in same place, which is quite a bit more sophisticated. Once the frames are moved and rotated, iMovie applies the amount of zoom necessary to cut off the black edges created by the correction. I suppose this could still be called a corrective zoom, but Randy's explanation is a lot more clear.
Two Things That Might Look Worse
In the same way shaky video can obscure what you want people to see, it can also hide things that you'd rather keep hidden. Once iMovie works its magic on your shaky footage, there are two other visual problems that will become much more noticeable.
Motion Blur
Unless you have a camera that shoots at really high framerates, it is possible to swing your camera around enough that the pixels will actually become blurred. Although iMovie can stabilize the frames relative to each other, it can't erase the blurriness of individual frames. Stabilized footage with blurry frames might look like the camera is moving in and out of focus.
CMOS Jello
If you are shooting video with a CMOS camera, like the new Nikon D90, your video is being shot with a rolling shutter, which means the sensor data reads from the top of the sensor to the bottom over a (very short) period of time. If the camera is moving during shooting, the results of a rolling shutter can make the world look like it's suddenly made of jello (link via Daring Fireball). Randy notes that stabilization can make the jello stand out and look especially jiggly. Because the overwhelming majority of video cameras and still cameras that shoot video use CCDs rather than CMOS sensors, most cameras will not suffer from the jello problem.
See It in Action
Randy was kind enough to send a link to some of his Africa footage that he used in the Macworld keynote. For the curious, he filmed with a Panasonic SD-5 (a CCD-based camera). Everything was shot hand-held, no tripods, and was later stabilized and edited in iMovie. Thank you, Randy, for the great information. It looks like it was a great trip!
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